A time capsule of the greatest financial mania in the history of mankind, told in real-time by regular folks and patriots. May future generations better understand the madness of crowds, and how power and money corrupt.

May 27, 2006

From Forbes - the big question on HP'ers mind - how to make $$ during the meltdown. Not great advice, still looking for the magic bullet, but here's theirs:Hat tip to Uknow...

Buy In Depressed MarketsIf you're a committed property investor, consider exchanging a pumped-up property in a hot coastal market for a comparable place in markets that are already deflating.

Play The VultureSometimes in an overpriced and illiquid market, you can snatch up a good deal well in advance of the fall. To get the best deals, call the distressed homeowner before the bank moves in to foreclose

Circle With The SharksIf being a vulture is too labor intensive, try buying from foreclosure sharks.

Don't Become PreyMake sure you don't get into a position where a vulture calls you. Even with the low mortgage rates of recent years, a lot of people bought by using by high-test "negative amortization" financing or its evil twin, the "interest-only" loan.

Downsize Your HouseMaybe you have too much house. The answer: Sell while you still can get a respectable return and move to a smaller residence

22 comments:

My life fades. The vision dims. All that remains are memories. I remember a time of chaos. Ruined dreams. This wasted land. But most of all, I remember The REALTOR®. The man we called "Lereah".

To understand who he was, you have to go back to another time. When the world was powered by the green fuel. And the desert sprouted great cities of Italian granite and stucco. Gone now, swept away. For reasons long forgotten, two mighty investor tribes went to war and touched off a blaze which engulfed them all.

Without credit, they were nothing. They built a house of straw. The thundering mortgage brokers sputtered and stopped. Their leaders talked and talked and talked. But nothing could stem the avalanche. Their world crumbled. The cities exploded. A whirlwind of looting, a firestorm of fear. Men began to feed on men. On the roads it was a white line nightmare. Only those mobile enough to scavenge, brutal enough to pillage would survive. The flippers took over the highways, ready to wage war for a 30-year fixed. And in this maelstrom of decay, ordinary men were battered and smashed.

Men like Lereah. The warrior Lereah. In the reset of an Option ARM, he lost everything. And became a shell of a man, a burnt out, desolate man, a man haunted by the demons of his past, a man who wandered out into the wasteland.

And it was here, in this blighted place, that he learned to live again...

The true bargains are two or more years away. Don't be tempted to buy now because of inventory, and someone who cuts their asking price from $599,000 to $549,000 when they bought two years ago for $299,000. I tried to "bottom fish" good companies a few months after the tech crash, and no way. I remember the 80's in the NorthEast in which it took about 4 years for the bottom.

You want to buy when no one wants to, and the banks make it really, really hard to get a mortgage again since they are so burned. But then again, they may make it easier with "take over payments" to anyone in order to keep it off the books.

I think the first post is an adaptation of the Gothic opening voice-over to "Mad Max: the Road Warrior".

My life fades. The vision dims. All that remains are memories. I remember a time of chaos. Ruined dreams. This wasted land. But most of all, I remember The Road Warrior. The man we called "Max". To understand who he was, you have to go back to another time. When the world was powered by the black fuel. And the desert sprouted great cities of pipe and steel. Gone now, swept away. For reasons long forgotten, two mighty warrior tribes went to war and touched off a blaze which engulfed them all. Without fuel, they were nothing. They built a house of straw. The thundering machines sputtered and stopped. Their leaders talked and talked and talked. But nothing could stem the avalanche. Their world crumbled. The cities exploded. A whirlwind of looting, a firestorm of fear. Men began to feed on men. On the roads it was a white line nightmare. Only those mobile enough to scavenge, brutal enough to pillage would survive. The gangs took over the highways, ready to wage war for a tank of juice. And in this maelstrom of decay, ordinary men were battered and smashed. Men like Max. The warrior Max. In the roar of an engine, he lost everything. And became a shell of a man, a burnt out, desolate man, a man haunted by the demons of his past, a man who wandered out into the wasteland. And it was here, in this blighted place, that he learned to live again...

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